Framework sought on joint gas exploration with China

HONG KONG – The Duterte administration wants a framework on joint oil and gas exploration with China “as soon as possible” and has vowed that any deal would be beneficial to Filipinos.

“If it’s acceptable to both sides, we could see the joint exploration done soon,” Foreign Affairs Secretary Alan Peter Cayetano told reporters here yesterday as he noted that the Malampaya field is “running out” of natural gas, even as demand for liquefied natural gas is growing.

“If our legal minds, the DFA (Department of Foreign Affairs), the Department of Energy, Malacañang and some of our consultants can come up with a framework tomorrow, I will send that to the Chinese tomorrow. If they can send it back to us the next day, and they say they agree, then we can start drafting the MOU (memorandum of understanding) or the agreement, and vetting it for official OK,” he added.

Cayetano said the Philippines wants a deal that is as good as the one on the Malampaya project.

“We are not giving up any territory... What we want is an arrangement that will be as good as Malampaya. For Malampaya we are getting 60-40,” the foreign affairs chief said.

“We desire a contract that’s as good or better than Malampaya... If we can have a deal that is as advantageous as Malampaya or better, what’s the difference if we are dealing with China?” he added.

Last February, the Philippines and China agreed to form a special panel that would draft a framework on exploring oil and gas in the South China Sea, claimed almost entirely by China.

Two areas are reportedly being eyed as sites of joint exploration. Service Contract 57, a project located in Calamian in northwest Palawan, is not covered by a maritime dispute, while Service Contract 72, which covers Recto (Reed) Bank, is one of the areas in the Philippines being claimed by China. 

The joint exploration was discussed during Duterte’s meeting with Chinese President Xi Jinping last Tuesday in Hainan, China.

Duterte has been accused of selling out the Philippines’ interests in the West Philippine Sea in exchange for Chinese assistance.

But officials denied this, saying the proposed exploration has a precedent – the 2005 Joint Seismic Marine Undertaking (JMSU) between the Philippines, China and Vietnam. The legality of the agreement, inked during the Arroyo administration, was challenged before the Supreme Court in 2008. The high court has yet to decide on the matter.

Cayetano said any deal with China should stand public scrutiny and comply with existing parameters.

“It’s important for people to see the benefits of our relationship. It’s important that we have something out of there,” he said.

Not taking sides

Also yesterday, presidential spokesman Harry Roque said President Duterte is not taking sides in the trade tensions between the United States and China when he said it is high time for Beijing to “protect the east.”

Roque said Duterte made the comments during his bilateral meeting with Xi last Tuesday in Boao.

“We do not take sides in the ongoing or possible trade war between China and the United states. The President, nonetheless, had positive words to say to that effect that it’s high time for China to protect the east and the cause of trade liberalism at this time and age,” Roque said at a press briefing here.

“Everyone basically in the meeting was talking about globalization, trade liberalization, and of course Asia was benefiting greatly from globalization and liberalization,” Roque said when asked to clarify Duterte’s remarks.

“So basically, it was an endorsement of the Chinese position that the world trading system governed by rules-based WTO (World Trade Organization) system and that there should be no obstacles to further globalization and liberalization,” he added. 

Roque noted that participants of the recently concluded Boao Forum for Asia had emphasized the need to further strengthen globalization and speed up trade liberalization rather than return to isolationist trade policies.

US President Donald Trump has slapped tariffs on $50 billion worth of Chinese goods as he accused the Asian country of intellectual property theft.

China responded by imposing $50 billion worth of tariffs on American goods.

The move prompted Trump to instruct his trade representative to study the imposition of additional $100-billion tariffs on Chinese goods.

Cayetano meanwhile admitted that a trade war would adversely affect the Philippines.

“If the US is sneezing and China is coughing, the Philippines will be somehow susceptible to the flu. There are flu shots available. The economic team is trying to do everything to bullet-proof our economy but there’s no such thing as bullet-proofing the economy,” Cayetano said.

“We’re hoping this will be short-lived and we’re hoping it won’t affect us too much,” he added.